Standpoint Research Upgrades Microsoft to "Buy" (MSFT)

Standpoint Research Upgrades Microsoft to “Buy” (MSFT)

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Analysts at Standpoint Research upgraded tech giant Microsoft Corporation (MSFT) on Wednesday after a 3 month period of decline as shares now look attractive again.

The analysts upgraded MSFT from “Hold” to “Buy” with a price target of $32. The new target is a +17% upside from Tuesday’s closing price of $27.32.

Standpoint Research analyst Ronnie Moas notes, “We have gone in-and-out of MSFT twice in the last four years…Since we last exited MSFT in September 2011 the shares have underperformed the Nasdaq and the S&P-500 by 1500 basis points. The stock has dropped 15% in the last three months and once again looks attractive (especially relative to the S&P).

“MSFT seems to be on track to compete with its current strategy, well-received new products [Xbox, Windows 8, Surface and Office]and upgrades.”

Microsoft shares were up slightly (+0.77%) in premarket trading on Wednesday. The stock is up +5.24% year-to-date.

Microsoft is one of the world’s largest software researchers and manufacturers. The company is well known for its Windows operating system products, as well as the Xbox gaming system, Microsoft Office software, and its recent entry into the tablet and smartphone markets. In the most recent quarter, MSFT reported net income of $4.47 billion on revenues of $16 billion.

Microsoft Dividend in Focus

Microsoft has paid out a dividend of $0.83 cents per share over the past 12 months. The company raised its quarterly dividend by 3 cents for most recent distribution, increasing quarterly payout from 20 cents per share to 23 cents per share.  This new quarterly payout has increased the company’s annualized dividend to 92 cents per share, which represents a dividend yield of 3.37% based on Tuesday’s closing price of $27.32. Microsoft’s next dividend of 23 cents per share has a pay date of March 14, 2013; the stock will trade ex-dividend early next year on February 19 (view the Dividend.com Ex-Dividend Tool for information on all upcoming ex-dividend dates).

Recent and future Microsoft dividends include:

  • June 14, 2012: $0.20
  • September 13, 2012: $0.20
  • December 13, 2012: $0.23
  • March 14, 2013: $0.23
In addition to slowly increasing its dividend payout over the past couple of years, Microsoft’s payout ratio has also gradually increase over the past three fiscal years:
 
Year Dividend ($B) Payout Ratio
2010 $4.4 24.4%
2011 $5.1 22.3%
2012 $9.4 37.6%

 

Microsoft vs. The Competiton

Dividend.com has identified several stocks that are in the same sector as Microsoft, including Apple Inc. (AAPL), Oracle Corp.  (ORCL), IBM  (IBM), and Hewlett-Packard  (HPQ). Currently Microsoft has one of the highest yields among its competition; only Hewlett-Packard current holds a dividend yield above Microsoft’s 3.37%.

Ticker Company Yield DARS
MSFT Microsoft 3.37% 3.4
AAPL Apple Inc. 1.96% 3.4
ORCL Oracle Corp 0.74% 3.2
IBM IBM Corp 1.75% 3.4
HPQ Hewett Packard 3.72% 2.8

 
Use the Dividend.com screener to see all dividend-paying consumer goods stocks, or run other custom searches for dividend-paying stocks.

Microsoft Corporation (MSFT) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here

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